In the midst of an increasingly saturated China bike-share market, the country welcomes yet another unicorn. Hellobike on Monday raised a fresh round of $321 million from Jack Ma’s affiliate, Ant Financial, catapulting its valuation to a staggering $1.47 billion, making it the latest addition to the global tech unicorn list.
How Hellobike become a bike sharing dark horse?
In the past few years, China was hit by a wave of iconically colorful shared bicycles aiming at revolutionizing urban travel.
While dozens of companies such as Beijing-based Mobike, Shenzhen-based Bluegogo, Ningbo’s Hellobike and Beijing-based Ofo all scrambled to carve out their own niche, only Mobike and Ofo managed to lead the pack, effectively enjoying a duopoly in the first tier Chinese cities, accounting for a combined total of 90% of China’s market.
Ofo, founded in early 2015, operates in over 250 cities and generates 32 million rides per day through its 10 million yellow bikes, whilst Mobike’s 200 million total users make about 30 million per day in China. Mobike is also founded in 2015.
Both Mobike and Ofo are on the unicorn list compiled by market intelligence service CB Insights.
Hellobike, on the other hand, didn’t come to the scene until 2016 year-end, two years later after Mobike and Ofo’s inception, remained the underdog most of the time up till now.
Hellobike, taking an approach to avoiding a head-to-head contest with the duopoly, opted to merge with Youon, another shared bike operator, late last year, to enhance its competitiveness in third and fourth-tier Chinese cities.
The company has already expanded into more than 100 second and third-tier Chinese cities, with more than 7 million orders per day and 80 million users.
And the bike sharing market in China has taken a sudden change since late last year.
Didi acquired Bluegogo which went out of business, lifestyle ecommerce platform giant Meituan-Dianping bought out Mobike to enter the highly competitive bike-sharing sector. Ofo has been struggling with rounds of rumors implying it’s on the verge of going bankrupt.
Whereas Hellobike managed to raise another US$700 million in April from seven new investors on top of its existing backers like Ant Financial and Fosun Group.
Following which, this latest Series D round, effectively cements Hellobike as a competent contender in China’s bike-sharing sector.
Mobike ended up being acquired by Meituan as the latter looks to expand as well as complement its services. Bike sharing rises as a solution for the last-mile transportation alternative for many of its customers who books a meal or movie ticket and needs to get around, Meituan presumes.
Ofo reportedly rejected Didi’s olive branch of acquisition last month. DAI Wei, founder and CEO of the company, according to a South China Morning Post story, assembled a meeting at which DAI compared his company’s current status to “Winston Churchill and wartime Britain as portrayed in the drama Darkest Hour,” people familiar with the matter told SCMP.
DAI held a talk with Didi founder CHENG Wei and told his counterpart at Didi that Ofo would never give up, the same SCMP story said.
Following the anecdote, there are speculations of massive layoffs at Ofo circulating in the internet in June. ZHANG Yanqi, its COO, was also rumored to have left the company and dissolving the overseas division under him.